House Leader Kevin McCarthy joined me to discuss the push to pass AHCA this morning:
HH: Joined now by the leader of the United States House of Representatives, Kevin McCarthy from the great state of California. Leader McCarthy, welcome back, good to have you.
KM: Thanks for having me.
HH: You know, I want to update people. I believe the American Health Care Act passed out of Ways and Means last night. Has it cleared Energy and Commerce, yet?
KM: No, they’re still working on it. And Energy and Commerce has jurisdiction over Medicaid, and in Ways and Means were the repealing of the taxes.
HH: And so do you expect that to happen today? And when do you expect it to go to Rules, and thus to the floor for a vote?
KM: Well, now remember this is different, Hugh, because we have to do this through reconciliation. So these bills don’t go to Rules. They then go next week to Budget.
KM: Because it comes through the budget mechanism. And then next week would be budget, and the then the third week, it would be ready for the floor. Now I don’t know, we’ll see how long Energy and Commerce takes. It could be longer than today. Democrats are throwing up every roadblock yesterday on the floor. They kept making motions to adjourn just to slow all of Congress down.
HH: Now I believe that the Speaker and you did a fine job explaining the three steps, but of the three elements in the bill, which I support, there’s the repeal of every Obamacare tax, there’s the devolution of Medicaid to the states, the first time that’s ever happened with an entitlement, and there are the tax credits. Let’s talk about them in turn, Kevin McCarthy.
HH: Is it correct every Obamacare tax will be repealed?
KM: Every one, but there’s not every one goes away completely at the very beginning. We repeal individual mandate, we repeal the medical device tax. But what happens, because we’re going through reconciliation, we’re going to do tax reform in the other element. What’s ever left will be repealed.
HH: Okay, secondly, the Medicaid devolution. I understand some states bet on expansion, and they’re going to win under this in terms of having a higher ceiling than maybe other states. But the fact is, tell me if I’m correct, this would, if successful, put a cap on Medicaid spending. That is the first time we’ve capped an entitlement.
KM: Yes, and what’s key here, you have to remember, if you take the spending of Medicaid just in the next ten years, in the tenth year, it’s going to cost a trillion dollars. And you know that’s equivalent to what we right now pay for all discretionary spending in government. I mean, that’s how much it’ll cost. So what we’ve done is it’s a three year phase that goes through. It caps it as it goes through in the process. This is one of the biggest entitlement reforms we have ever had in the last quarter century.
HH: So how do you feel with your caucus right now? You can lose up to 20 members and still pass this. You won’t get a single Democratic vote, I don’t think. Have you got the votes, Kevin McCarthy?
KM: We will get there. We’re building right now as everybody begins to see this. And remember, this is three phases. This is the first phase. Now Hugh, if we had the ability to have 60 votes in the Senate, we could do everything we want right now. Unfortunately, just as your first question, we have to do this through reconciliation. And what that means is we have to abide by the rules of the Senate and the Byrd rule. So if we want to put in this bill to sell insurance across state lines, it then goes to a 60 vote bill. So why we’re doing it in three phases, we’ll take everything we possibly can out, and this is the exact same thing as we’re repealing when we did this last time sending it to the President’s desk. Secondly, we’ll replace it, everything we can replace with that passes the Byrd rule in the Senate. The second phase is in the ACA, it gave a great deal, amount of power, 1,400 times they mentioned the power of the Health and Human Service secretary never thinking that Dr. Tom Price would become the secretary. You know Tom very well. He will start his role of what he’s doing. The third phase will also start at the same time. Those bills that take 60 votes, some of those we’ll vote on before we even vote on the replacement bill. And then right after the replacement bill, we’ll follow that up with tort reform and others.
HH: So that is the plan. I think people are beginning to get the plan. You still have some opposition to people who want to go through the, I think it’s a grand gesture of sending the bill that got to the President’s desk, because that bill would not get through the Senate this time under reconciliation. That’s my view. It would not get there, correct?
KM: Oh, no. It takes 60 votes. And think of what the opposition is. Okay, so if they’re saying well let’s repeal everything, and then try to pass something with 60 votes. Do you think that’s ever going to be possible?
HH: I think it was…
KM: Think of the collapse in the market.
HH: I think it was possible until the Medicaid letter came out from Rob Portman, Lisa Murkowski, Senator Capito. Then I said okay, let’s just go to what’s real, because you’ve got a narrow gate now. Tom Cotton tweeted this morning, Leader McCarthy, that you should slow down. What is that all about?
KM: I’m not quite sure. I know Tom very well. We’re good friends. Slow down? We have worked six years on this. What I see is the process is working. We’re going through Energy and Commerce. We’re going through Ways and Means. We’re going through Budget. We’re going to the floor, sending it to the Senate. Think about everything that we have to get done. We have studied this six years. The reason why you do Obamacare repealing and replacing first, because you repeal all those taxes, well, that’s a trillion dollars. So that lowers the baseline that allows you to expand how big a tax reform you’re going to be able to achieve.
HH: You also have to get the mandate off the backs of employers and the 50 employee rule so that they can grow beyond 50 without getting under Obamacare. There’s so many upsides of this. So talk to me about the President. Have you spoken with the President about his effort to get this passed?
KM: Yes. We sat and met together, and the President is very engaged. He’s going on the road. He’ll be in Kentucky, I believe, Saturday. He’s having people come in and meeting with him. The President understands this plan very well, and he supports it. The other part, too, that you make a very good point here. Obamacare is in a death spiral. That’s not my quote. That’s the CEO of Aetna. If you think about, you have 3,000 counties in America. You know what Obamacare has done? One-third of those, 1,022, now have only one provider. With Humana pulling out, 16 counties in Tennessee have no provider. Obamacare created 23 co-ops, mandated that people have to buy, gave them $2 billion dollars, and in that short amount of time, 18 of those co-ops have collapsed, and the government still wants to punish you with the individual mandate when you don’t even have the ability to get insurance. Remember what the President said? Obama, when he was going to lower the premiums, and we all know what has happened with these premiums. We want to lower the cost of health care, actually replace Obamacare, cap entitlement, the biggest entitlement reform we’ve ever found. This is the mechanism to do it in the first phase of three phases.
HH: There’s a velvet glove being used right now, pizza and bowling, and that’s all great. But will the hammer come down? Will there be primary challenges to Republicans who obstruct the repeal of Obamacare?
KM: Look, what I see is we’ve got a couple of weeks to go here. As more people understand the bill, I believe we will have the votes, we’ll get it through. This is just part of the legislative process. When people don’t understand or people have other questions, we’re listening. But we’ll solve this, we’ll get it through, we’ll be a united party, and we’ll show the country that conservative ideas can solve these problems just as we said when they were trying to pass Obamacare, that it would fail. Unfortunately, we were correct. And now we have to solve it.
HH: I have spent some time on the radio and on television sets with President Trump. But I haven’t had the one on ones with you. Do you think he’s the kind of fellow who’s going to take no for an answer on this? This is a signature for him.
KM: No. I’ve watched President…this man is a fighter. This man understands what’s at stake here. This isn’t the only part of making this country come back. Regulation reform, health care reform, tax reform, those are the elements to get this country growing again, and this is the key foundation. If we stumble here, the others will be harder to do as well.
HH: That’s absolutely, I think it’s a momentum killer. The perfect must not be the enemy of the good. Now the Freedom Caucus, I’ve got a lot of friends of mine in there like Jim Jordan, etc. Have you sat down with them, yet and just said guys, it’s about 51 votes in the Senate? What part of that don’t they get?
KM: They still believe that if you just repeal it and sit back and watch everything collapse, that the Democrats will come and vote for it. I’ve never watched that happen.
HH: They will never do that.
KM: They won’t, and so that’s the difficulty, and that’s why I believe at the end of the day, they’ll come on board.
HH: All right. So let me turn to the Defense Appropriation bill if I can, Leader McCarthy.
KM: We just passed that yesterday.
HH: Yeah. When does that go over to the Senate? And does it have enough money in it to get the rebuilding of the Navy done that the President promised?
KM :Now remember, this is 2017, so this is prior to President Trump. And President Trump will now ask for a supplemental, and then he will lay out his budget, Mick Mulvaney and others coming through. So this gets us through right now, because remember, we’re living under a continuing resolution, the very worst thing you can do to the military. You’re tying their hands, you’re living over past decisions, and you can’t go in and fund something going forward. This takes into effect the NDAA, it is a good bill, it is a very good start. And now we can start on the supplemental when the President sends it up to us.
HH: Now I also want to go back to the Congressional Review Act. You have been running the train station for this, and it’s very, very effective, and a lot of my friends in the media don’t realize what’s happening. How many CRA repeals have you pushed through? How many more to go?
KM: This is something I’ve been some of the most proud of. We have passed on this floor 14. And remember, prior to this Congress, only one of them has ever been signed into law in the history of America. We have now had three signed. The Senate is taking up the others. You’ll see more going to the President’s desk. And it’s not like you’re just repealing something for the next two to four years. For the history of America, they can’t come back to this. And it’s changing the attitude and the climate in the business community to realize that. They’re not going to oppressive down onto you. It’s going to be common sense. And it’s not going to be these agencies overtaking the role of Article I and thinking they have the role to legislate.
HH: Last question, Leader McCarthy. There is an argument that the CRA can go even further back than 60 legislative days if a rule was not accompanied by the right report. Have you looked into that, yet?
KM: Yes, we’re looking into that right now, and if that’s the case, and we get the ruling that it comes back to be true, there’s a lot of other elements that we can go back and solve.
HH: That will be terrific. Leader Kevin McCarthy, I’ll talk to you later. Thank you, my friend, and good luck in getting your Freedom Caucus friends and my friends on board, because we’ve got to get this to the Senate. I appreciate the time.
KM: Thank you.
End of interview.